There is a main consultation on draft amendments to the VAT regulations and a draft VAT notice about keeping digital records and providing VAT returns using compatible software, as the first stage of the planned implementation of its Making Tax Digital programme. The proposed secondary legislation would make changes to the VAT regime, effective from 1 April 2019. Businesses with taxable turnover above the VAT registration threshold now fixed at £85,000 will have to keep digital records and submit VAT returns using compatible software. In addition there is a proposed addendum to the draft VAT Notice, setting out how businesses could use compatible software alongside spreadsheets to provide VAT returns. The proposed legislation requires VAT registered businesses to keep an electronic account of information specified in the amended regulations and use an approved form of software to prepare and deliver returns. These obligations will not apply to businesses if their VAT taxable turnover for the previous 12 months is below the VAT registration threshold in force at the start of the next month. Once the threshold is exceeded, the obligations will commence from the business’s next return period. However, once any business is caught by these regulations, then even if the business’s VAT taxable turnover subsequently falls below the exemption threshold they will still be obliged to keep and preserve digital records and provide VAT returns using functional compatible software unless and until they deregister from VAT. The regulations provide exemptions based on turnover, an inability to use electronic systems for religious or practical reasons and for businesses subject to insolvency, but exempt businesses may opt for the obligations in the amended regulations to apply to them if they wish. The amended regulations also provide rules for how business records should be preserved. Originally Making Tax Digital was to apply to all businesses but the government announced on 13 July 2017 that, for the time being, only businesses above the VAT registration threshold will participate in Making Tax Digital from 1 April 2019. The rest of quarterly reporting requirements will not be introduced before tax year 2021-22 at the earliest. The consultation closes on 9 February 2018.